Updates on iEmergent and Mortgage MarketSmart, including features, editorials, and more.
You could call iEmergent a startup company that’s been 16 years in the making.
Originally launched as a family-owned consulting business, the company pivoted in recent years into a fast-growing software product company that’s building a national clientele for its innovative mortgage market forecasting tool.
The company was founded by Dennis Hedlund, who before starting the business was an executive vice president with Wells Fargo & Co. As an analytics and consulting company, iEmergent had many of the 10 largest U.S. banks as clients. It’s now capturing many of the largest mortgage lenders as customers for its software product, Mortgage MarketSmart.
Hedlund’s daughter, Laird Nossuli, and her husband, Bernard Nossuli, now run the company as the CEO and chief operating officer, respectively. Hedlund died in March.
“My dad was a brilliant man, but he wasn’t a salesman,” Laird Nossuli said. “Running a business wasn’t his forte. My mom told him, ‘You need some help.’ ”
One of the people recommended to them six years ago by the Pappajohn Center at Iowa State University was Mike Colwell, executive director of accelerator program SquareOne DSM, which at that time was called the Business Innovation Zone.
“(Colwell) has really been the foundation, the push to take us where we are now,” Nossuli said. “He’s just been a great ally. He made us realize that we have high growth potential and that we have something unique and special and that we just needed to build around that.”
The predictive driver developed by iEmergent is the Purchase Mortgage Generation Rate, or the rate at which an individual market generates purchase mortgages. By developing that predictive model, iEmergent is able to generate forecasts that actually quantify projected loan volume and dollar amounts for markets, rather than just listing all the indicators that should be considered when evaluating a market. Using the software, a lender can identify where it may need to open new branches or further concentrate its lending efforts.
A big aha moment came when they realized that maps were the key to presenting highly detailed and localized data in an easy-to-use format.
“Fast-forward three years from that point,” Bernard Nossuli said, “and mapping and cloud technology aligned so that we could build a web app that uses maps and simple tools to make this very rich data accessible to anybody in an organization.” The company developed the software through a collaboration with Cedar Falls-based Far Reach.
With interactive maps, “it takes a lot less time as a client to analyze the data,” Nossuli said. “A client can can look at it and say, ‘Let me overlay my branches and see if I have somebody there, or do I need to put a branch there? Or do I otherwise have gaps, or is it a training issue, and go from there.’ ”
The tool also can help lenders address some of the new regulations mandated by the Consumer Finance Protection Bureau, Laird Nossuli said. “All of those fair lending and community development regulations are a serious challenge,” she said. “It’s not just telling lenders where to go, but how can you do a better job at serving the communities that in the past have been underserved, whether because of income or race.”
In the next decade, minority households will generate an estimated 75 percent of new household formation, so the company anticipates that its product will be an important tool for lenders to proactively target those markets.
“What’s so eye-opening to us is that we were assuming that banks and mortgage lenders were making bad decisions because they don’t care,” she added. “But a lot of times they were making those decisions because they didn’t know — they didn’t have the data. We were blown away by how little information some of the larger lenders have.”
Currently, most of iEmergent’s clients are large regional or national lenders, half of which are banks and the other half independent mortgage companies. The company is now developing a 2.0 version of Mortgage MarketSmart that will make it more usable at the community bank level.
“The point of 2.0 is to build a tool that is a lighter version that anyone in the organization can read on a mobile device, to make it easier to share,” Laird Nossuli said. “And also create a few new very problem-specific modules, such as a compliance model, that address specific business problems.”
Most of iEmergent’s consulting is now done in conjunction with customers’ use of its product, and the company anticipates its work will transition completely away from stand-alone consulting services in the future.
The company’s sales of the new product grew by 150 percent in the past year, driving its first profitable year under its new business model.
iEmergent, which now has a staff of four full-time and eight part-time employees, recently hired a chief growth officer, Fenn Meents, who was recruited from its first client in Atlanta. Meents had worked with iEmergent’s app for the previous three years and became one of its biggest fans.
“The piece that I really liked was that you could use it at the ground level, from the loan officers all the way to the board of directors,” Meents said. “Each rung in that corporate ladder really found a lot of value in the maps.”
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